A leading American guitar maker needed to confront shrinking natural resources critical to manufacturing their instruments by reducing waste and displaying their commitment to green initiatives. Armanino provided a strategic plan and projected ROI model that addressed issues in their supply chain, human resources, sales and marketing and spurred company-wide adoption, which resulted in projected savings of approximately $700,000.
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Benefits
In an industry dependent on the world’s shrinking natural resources, a guitar manufacturer felt the effects of scarcity. After a long history of sourcing the finest woods to make their instruments, the company felt a need for change due to a shrinking lumber supply base. For example, ash trees in forests in the eastern United States are becoming increasingly infested with non-native insects, limiting the available lumber.
Upon further examination of their manufacturing processes, the company recognized an opportunity to reduce waste and increase efficiency. Amongst their three most used wood species (ash, alder and maple), the company scrapped substantial board-feet per year in the production of their instruments. Identifying an opportunity to both reduce this scrap and connect with a new, younger customer base, business leaders decided that a marquee sustainability initiative would ease pressure on their manufacturing and make headway toward their green goals.
The initial scope of the company’s sustainability campaign included finding ways to refine production and utilize a higher percentage of raw materials. Additional goals included establishing the company’s brand as a leader in sustainability and an advocate for greener business practices. The action plan for the initiative was as follows:
The company set out to find a strategic business partner capable of building a business case for an investment in a sustainable future. They engaged with the Strategy and Transformation team at Armanino to take a deep dive into the sustainability business case and provide needed expertise.
Over a 3-month period, Armanino collected data through interviews with key stakeholders and drafted an ROI model to justify the company’s sustainability undertaking. Additionally, the team performed extensive market research and benchmarking analysis.
The plan focused on bringing green initiatives to the following impact areas:
The company’s goals involving their wood supply and manufacturing waste, their employees, and their products and brand were met with Armanino’s recommendations:
Supporting the claim that the sustainability program benefits outweigh the investment costs, the final ROI model for the sustainability initiative revealed a positive return within 12 months. The first year of the program projected new revenue generating products would grow the top line, and net savings alone would total approximately $700,000.
When the engagement kicked off, the company’s leadership team had an idea they wanted to explore — they just weren’t sure if it was worth pursuing. As a result of the Strategy and Transformation project with Armanino, business leaders now have a blueprint and an investment model providing direction and value in moving forward with their initiatives. The company looks forward to implementing greener business processes and establishing a socially responsible corporate brand that aligns with the contemporary movement for a sustainable future.
February 05, 2021
